Emerson v. Cape Fear Country Club, Inc.
Emerson v. Cape Fear Country Club, Inc.
Opinion
*404 *756 N.C.G.S. § 55A-6-31(a) calls for nonprofit corporations to act "in a manner that is fair and reasonable and ... in good faith" when they terminate or suspend a membership. N.C.G.S. § 55A-6-31(a) (2017). However, it does not require a country club's board of directors, in all situations, to provide a member with prior notice or an opportunity to be heard regarding the termination of a membership.
Plaintiff, William P. Emerson, Jr. ("Emerson"), appeals from the trial court's order granting summary judgment in favor of Defendant, Cape Fear Country Club, Inc. ("Club"), a nonprofit corporation, on all of Emerson's three claims. In his Complaint, filed 21 April 2016, Emerson sought declaratory judgments as to (1) Emerson's membership status in the Club and (2) whether the Club could, in alleged compliance with N.C.G.S. § 55A-6-31(a), conduct a curative hearing after Emerson's membership had been terminated. Emerson's third claim for relief sought compensatory and punitive damages for his hypothetical expenses in joining a comparable country club and for the Club's purportedly wrongful and malicious termination of his membership.
Below, we address (1) the statutory requirement of N.C.G.S. § 55A-6-31(a), (2) Emerson's failure to mitigate his alleged damages, and *757 (3) the mootness of Emerson's remaining claims. While we hold that the statute does not require prior notice and a participatory hearing in all situations, even if notice and a hearing are required here, Emerson failed to mitigate his alleged damages resulting from the Club's alleged violation of N.C.G.S. § 55A-6-31(a). Thus, Emerson is barred from recovering the compensatory and punitive damages sought in his Complaint. Due to our resolution of Emerson's third claim for relief, his first two claims under the Declaratory Judgment Act are moot, and we decline to address them. Accordingly, we affirm the trial court's grant of summary judgment in favor of the Club on each of Emerson's claims.
BACKGROUND
On 1 January 2016, Emerson, who had been a member of the Club for approximately 30 years, had a disagreement with an employee in the golf shop. 1 The employee reported the incident to the Club's General Manager, Mary Geiss, who brought the matter to the attention of the Executive Committee by email on 2 January 2016. This was not Emerson's first act of misbehavior, and Club President Buck Beam and other members of the Executive Committee met on 5 January 2016 to discuss the incident. The Executive Committee then called a special meeting of the Board of Directors ("Board"), which met and voted on 7 January 2016 to terminate Emerson's membership.
It is uncontested that Emerson was aware neither of the Executive Committee's nor the Board's deliberations until 8 January 2016, when the Club President and two other Board members called Emerson to advise him of his termination. Emerson also received a letter from the Club President dated 8 January 2016 informing him of his termination. The letter provided the grounds for termination, stating that it was "in response to [Emerson's] actions on club property on January 1, 2016 and [Emerson's] cumulative *405 disciplinary history while a member of Cape Fear Country Club." Emerson's disciplinary history at the Club included one incident on or about 27 February 2005 and another incident on 29 April 2007. *758 In the February 2005 incident, Emerson got in an argument with another Club member, which resulted in damage to Club property. Emerson also threatened a Club employee's job. In response to the 2005 incident, Emerson was suspended for thirty days, placed on a twelve-month probation period, given a twelve-month alcohol prohibition, fined $1,500, and required to replace the damaged property and apologize to the employees involved. Emerson appealed and was given an opportunity to appear before the Board. The Club eliminated the twelve-month probationary period, the twelve-month alcohol prohibition, and the $1,500 fine as conditions of Emerson's punishment. Although the record reflects that Emerson came on to Club premises during his suspension, thus violating its terms, his written apology of 3 June 2005 prompted the Club's then-President to lift Emerson's suspension.
In the April 2007 incident, Emerson had some sort of dispute with another Club member in the Card Room after a disagreement over a golf bet. As a result, Emerson's membership was suspended for six months. Emerson's initial readmittance was unsuccessful after Emerson's "address at the Board of Directors meeting," and the Board decided to extend Emerson's suspension for an additional six months. The Board received letters on Emerson's behalf from other Club members and decided to invite Emerson back to his membership approximately two months after imposing the additional six-month suspension.
In the instant matter, after notifying Emerson of the termination of his membership by letter dated 8 January 2016, the Club President sent Emerson another letter dated 5 February 2016. This subsequent letter advised Emerson that the Board "[was] prepared to provide [Emerson] an opportunity to speak on [his] behalf concerning the termination of [his] membership." Emerson acknowledged receipt by letter on 12 February 2016 but declined to attend the proposed 15 February 2016 meeting.
Emerson filed his Complaint on 21 April 2016. After discovery and depositions, the trial court disposed of Emerson's claims by entering summary judgment in favor of the Club. Emerson timely appealed.
ANALYSIS
"The standard of review for summary judgment is de novo."
Forbis v. Neal
,
Emerson's Complaint raises questions about the procedural requirement of N.C.G.S. § 55A-6-31, which governs the termination, expulsion, and suspension of an individual's membership in a nonprofit corporation.
N.C.G.S. § 55A-6-31 states:
(a) No member of a corporation may be expelled or suspended, and no membership may be terminated or suspended, except in a manner that is fair and reasonable and is carried out in good faith.
(b) Any proceeding challenging an expulsion, suspension, or termination shall be commenced within one year after the member receives notice of the expulsion, suspension, or termination.
(c) A member who has been expelled or suspended may be liable to the corporation for dues, assessments, or fees as a result of obligations incurred or commitments made by the member prior to expulsion or suspension.
Emerson's Complaint alleges various deficiencies with the Board's termination, including: the failure to notify Emerson of the 7 January 2016 meeting, the lack of opportunity for Emerson to appear, hear, or present *406 evidence at the meeting, and the alleged failure by the Board to hear from witnesses against Emerson at the meeting.
Our only precedent interpreting the requirement of N.C.G.S. § 55A-6-31(a) has involved First Amendment issues not argued here.
2
See
Tubiolo v. Abundant Life Church, Inc.
,
*760 A. Compensatory and Punitive Damages
To determine whether N.C.G.S. § 55A-6-31 includes participatory rights-the purported violation of which forms the basis of Emerson's claim for compensatory and punitive damages-we begin with the text of the statute.
See
Elec. Supply Co. of Durham v. Swain Elec. Co.
,
The General Assembly enacted the first version of the North Carolina Nonprofit Corporation Act in 1955 ("1955 Act").
See
Both the 1955 Act and the Model Act have been amended over the years. The A.B.A. adopted the Revised Model Nonprofit Corporation Act in 1987 ("Revised Model Act").
See
Subcomm. on the Model Nonprofit Corp. Law of the Bus. Law Section, A.B.A.,
Revised Model Nonprofit Corporation Act
(1988). The General Assembly then amended the 1955 Act in 1993, which added many new provisions and re-codified the North Carolina Nonprofit Corporation Act ("1993 Act") to mimic the Revised Model Act in many ways.
See
For example, Section 6.20 of the Revised Model Act states:
(a) A member may resign at any time.
*761 (b) The resignation of a member does not relieve the member from any obligations the member may have to the corporation as a result of obligations *407 incurred or commitments made prior to resignation.
Subcomm. on the Model Nonprofit Corp. Law of the Bus. Law Section, supra , at 112-13. N.C.G.S. § 55A-6-30 provides:
(a) Any member may resign at any time.
(b) The resignation of a member does not relieve the member from any obligations incurred or commitments made to the corporation prior to resignation.
N.C.G.S. § 55A-6-30 ;
see also
When the General Assembly adopts verbatim some provisions of a model code and rejects others, we assume that the General Assembly consciously chose to author its own alternate provisions.
See
Newbold v. Globe Life Ins. Co.
,
Here, although the General Assembly adopted some parts of the Revised Model Act's § 6.21 in N.C.G.S. § 55A-6-31, other parts of N.C.G.S. § 55A-6-31 deviated from the Revised Model Act's language. N.C.G.S. § 55A-6-31(a) provides: "No member of a corporation may be expelled or suspended, and no membership may be terminated or suspended, except in a manner that is fair and reasonable and is carried out in good faith."
In contrast, the Revised Model Act's § 6.21(b) provides:
(b) A procedure is fair and reasonable when either:
(1) The articles or bylaws set forth a procedure that provides:
*762 (i) not less than fifteen days prior written notice of the expulsion, suspension or termination and the reasons therefore; and
(ii) an opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension or termination by a person or persons authorized to decide that the proposed expulsion, termination or suspension not take place; or
(2) It is fair and reasonable taking into consideration all of the relevant facts and circumstances.
Subcomm. on the Model Nonprofit Corp. Law of the Bus. Law Section, supra , at 114. Omitting these procedural considerations, the General Assembly copied almost all the Revised Model Act's language for the remaining sections of N.C.G.S. § 55A-6-31. N.C.G.S. § 55A-6-31(b) and (c) are nearly identical to the Revised Model Act's § 6.21(d) and (e), respectively. Compare N.C.G.S. § 55A-6-31(b) - (c), with Subcomm. on the Model Nonprofit Corp. Law of the Bus. Law Section, supra , at 114. 3
*408
*763
The General Assembly had the opportunity to codify a notice or hearing procedure within N.C.G.S. § 55A-6-31(a) -as expressly provided in the Revised Model Act, upon which N.C.G.S. § 55A-6-31 is based-and declined to do so. Therefore, the General Assembly did not intend to provide for the Revised Model Act's notice or hearing procedures in N.C.G.S. § 55A-6-31(a).
See
Newbold
,
Assuming
arguendo
that N.C.G.S. § 55A-6-31(a) as applied to the situation here required the Club to provide Emerson with prior notice and a hearing-the lack of which forms the basis of Emerson's claim for compensatory and punitive damages-Emerson failed to mitigate his damages allegedly resulting from the Club's failure to provide notice and a hearing. "Under the law in North Carolina, an injured plaintiff must exercise reasonable care and diligence to avoid or lessen the consequences of the defendant's wrong. If plaintiff fails to mitigate his damages, 'for any part of the loss incident to such failure, no recovery can be had.' "
Lloyd v. Norfolk S. Ry. Co
.,
Here, Emerson acknowledged that the Club offered him "an opportunity to speak on [his] behalf," and Emerson chose not to attend this proposed meeting on 15 February 2016. Rather, Emerson claimed that the meeting was "a disingenuous effort to validate an invalid termination." Even assuming that the Club's failure to provide Emerson with notice and an opportunity to be heard violated N.C.G.S. § 55A-6-31(a), Emerson had an obligation to "lessen the consequences of the [the Club]'s wrong."
See
Lloyd
,
B. Declaratory Judgment Act
Emerson's claims for declaratory judgments are rendered moot by our determination that Emerson failed to mitigate his alleged damages. A cause of action may be moot under the Declaratory Judgment Act when a litigant seeks only a determination that some action was unlawful without seeking some form of relief from the allegedly unlawful conduct.
See
Hindman v. Appalachian State Univ.
,
In
Citizens
, we declined to decide an "abstract proposition of law" where plaintiffs sought a legal determination that a building was unlawful but did not seek closure of the building.
Similarly, in
Hindman
, plaintiff professors at Appalachian State University ("University") sued their employer for its failure to pay the salary provided in plaintiffs' employment contracts.
Hindman
,
Here, Emerson's first claim for relief in his Complaint states that "Emerson is entitled to a declaratory judgment relating to the status of his membership in [the Club]." Emerson's second claim for relief states that "Emerson is entitled to a declaratory judgment as to whether or not the Board can now conduct a curative hearing in a manner that is fair and reasonable and carried out in good faith, having previously terminated his membership in violation of [ N.C.G.S. § 55A-6-31(a) ]."
Were we to issue a judgment stating that the manner of Emerson's membership termination fell short of the "fair and reasonable and ... good faith" requirement in N.C.G.S. § 55A-6-31(a) or that post-termination hearings are impermissible under N.C.G.S. § 55A-6-31(a), such determinations would have no practical effect in this case. Unlike
Hindman
, where the plaintiff professors sought a declaratory judgment without any
*410
other remedy or damages, Emerson does seek compensatory and punitive damages alongside the declaratory judgments.
See
Hindman
,
Emerson seeks declaratory relief with respect to the
manner
of his termination from the Club, and such a declaration would not alter the rights or obligations of the parties.
4
Similar to
Citizens
and
Hindman
,
*766
it may be possible here to identify a violation of N.C.G.S. § 55A-6-31(a), but the proposition would be abstract or academic, like a judgment that a school building is unlawful or that a contract has been breached when no further relief is sought.
See
Hindman
,
CONCLUSION
Emerson failed to mitigate his alleged damages and is barred from recovering compensatory and punitive damages for the Club's alleged violation of N.C.G.S. § 55A-6-31(a). Accordingly, the issues presented in Emerson's requests for declaratory judgments are moot, as a resolution of these questions would not have any practical effect on the controversy, and we decline to address them. The trial court's grant of summary judgment in favor of the Club on each of Emerson's claims is affirmed.
AFFIRMED.
Judge CALABRIA concurs.
Chief Judge McGEE concurs in result with separate opinion.
McGEE, Chief Judge, concurring in result with separate opinion.
I agree the trial court properly granted summary judgment in favor of Defendant. However, I write separately to respectfully express my view that this Court's analysis should be limited to the issues specifically raised by Plaintiff's appeal. It is sufficient to conclude Plaintiff has failed to show that N.C.G.S. § 55A-6-31(a) requires prior notice and a hearing as a matter of law .
Plaintiff asserts in his appellate brief that the termination of his club membership (1) was neither fair and reasonable nor executed in good faith, as required by N.C.G.S. § 55A-6-31(a) ; and (2) was inconsistent with various other sources of non-binding authority. Plaintiff begins by noting the general proposition that
[t]o determine whether the established facts [show a] termination [was] in a manner that [was] fair and reasonable and [was] carried out in good faith, this Court *767 is left to "[t]he first maxim of statutory construction [which] is to ascertain the intent of the legislature. To do this[,] this Court should consider the statute as a whole, the spirit of the statute, the evils it is designed to remedy, and what the statute seeks to accomplish."
(quoting
State v. Johnson
,
By its plain language, N.C.G.S. § 55A-6-31(a) does not provide that a termination or suspension of membership will
only
be deemed "fair and reasonable" and "carried
*411
out in good faith"
if
the member subject to termination or suspension is afforded prior notice and an opportunity to be heard. Nevertheless, Plaintiff asks this Court to hold that Defendant violated N.C.G.S. § 55A-6-31(a)
as a matter of law
by not providing him "notice of the charges against him and a hearing or an opportunity to respond to those charges prior to termination [of his membership][.]" " 'The primary rule of statutory construction is that the intent of the [L]egislature controls the interpretation of a statute.' "
Belk v. Belk
,
Notably, in his appellate brief, Plaintiff offers no substantive discussion of "the text, structure, and policy of [ N.C.G.S. § 55A-6-31(a) ]," the statute's legislative history, or the purpose of our General Assembly in enacting it.
See
Electric Supply Co. v. Swain Electrical Co.
,
*768
In support of his argument that prior notice and an opportunity to be heard are mandatory under N.C.G.S. § 55A-6-31(a), Plaintiff relies
entirely
upon the following sources of authority: (1) guidelines and recommendations published by the Club Managers Association, a professional trade association; (2) case law from other jurisdictions, interpreting and applying non-North Carolina law and legal principles; (3) Robert's Rules of Order; and (4) statements purportedly made by attorneys who were members of Defendant's Board during internal discussions about Plaintiff's termination. These sources are insufficient to support a violation of N.C.G.S. § 55A-6-31(a). Plaintiff has not argued, for example, that the General Assembly intended N.C.G.S. § 55A-6-31(a) to reflect or incorporate the "industry standards" he cites. Defendant's alleged failure to follow Robert's Rules of Order, and the internal discussions of its own attorneys regarding the termination of Plaintiff's membership, likewise lack relevance to the question of statutory construction. Plaintiff does not explain why Defendant's alleged violation of Robert's Rules of Order constituted a violation of N.C.G.S. § 55A-6-31(a) ; Plaintiff argues only that Defendant "failed to follow its [own] requirements or guidelines." Similarly, the opinions expressed by attorneys serving on Defendant's Board that, prior to the termination of Plaintiff's membership, "there should be some due process[,]" and that the Board "may want to allow [Plaintiff] an opportunity to ... speak on his actions[,]" do not establish that such measures were
mandated by N.C.G.S. § 55A-6-31(a)
, or that the Board violated the statute by deciding not to follow those recommendations. Finally, while this Court may consider the non-binding decisions of other jurisdictions if we find such authority "instructive[,]"
see
Carolina Power & Light Co. v. Employment Sec. Comm'n of N.C.
,
Plaintiff has failed to identify any controlling or persuasive authority to support his proposed construction of N.C.G.S. § 55A-6-31(a) as imposing per se notice and hearing requirements and, as discussed by the majority, aspects of the statute's legislative history *412 suggest our General Assembly intentionally omitted per se notice and hearing requirements from the plain language of the statute. This concludes our inquiry. It is unnecessary to address Plaintiff's alleged failure to mitigate damages, since Plaintiff's claim for damages is premised upon a violation of N.C.G.S. § 55A-6-31(a) and, absent a statutory violation, those claims necessarily fail. It is also important to note that our holding *769 in the present case does not preclude a finding that, under the facts and circumstances of a particular case, a lack of prior notice and/or hearing could violate the "fair and reasonable" and "good faith" language in N.C.G.S. § 55A-6-31(a). Plaintiff has simply failed to persuade this Court that the statute mandates prior notice and a hearing in all instances.
The nature and content of the 1 January 2016 incident are somewhat in dispute. In his affidavit, the Club President relayed the contents of an email from the Club Manager, who wrote that Emerson used expletives in his conversations with Club employees and in front of Club guests during the 1 January 2016 exchange and declared, "[T]his is war," to one of the Club employees. In his deposition testimony, Emerson claimed that he was not shouting or cursing during the exchange and disagreed with one Club employee's characterization of the exchange between Emerson and the employee. Later in his deposition, Emerson did not object to another witness's description of the incident as a "profanity-laced tirade" by Emerson.
Although our opinion in
Johnson v. Antioch United Holy Church, Inc.
,
The General Assembly adopted the following The Revised Model Act provides: language from the Revised Model Act: (d) Any proceeding challenging an (b) Any proceeding challenging an expulsion, suspension or termination, including expulsion, suspension, or termination shall be a proceeding in which defective notice is alleged, commenced within one year after the member must be commenced within one year after the receives notice of the expulsion, suspension, or effective date of the expulsion, suspension or termination. termination. (c) A member who has been expelled or (e) A member who has been expelled or suspended may be liable to the corporation for suspended may be liable to the corporation for dues, assessments, or fees as a result of dues, assessments or fees as a result of obligations incurred or commitments made by obligations incurred or commitments made prior the member prior to expulsion or suspension. to expulsion or suspension. N.C.G.S. § 55A-6-31(b)-(c) (emphasis added). Subcomm. on the Model Nonprofit Corp. Law of the Bus. Law Section, supra, at 114 (emphasis added). N.C.G.S. § 55A-6-31(b) replaces "must" with The italicized portion of § 6.21(d) does not appear "shall" and allows for members to challenge in N.C.G.S. § 55A-6-31(b). decisions within one year of notice. The italicized portion of N.C.G.S. § 55A-6-31(c) does not appear in § 6.21(e) of the Revised Model Act.
Emerson's Complaint did not seek injunctive relief in the form of reinstated membership. Had Emerson sought a mandatory injunction requiring reinstatement, the declaratory judgment may not have been moot because this remedy would constitute further relief, which was lacking in
Citizens
and
Hindman
. However, without deciding issues not present, we observe that the question of judicial reinstatement of membership in a nonprofit corporation may implicate a nonprofit corporation's First Amendment associational rights.
See
Boy Scouts of Am. v. Dale
,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.